A E900 million (US$90 million) oil contract that was awarded without being tendered has been cancelled by the Swaziland Government after more than four years.
Kantey & Templer had been contracted to build a 'Strategic Oil Reserve' at Phuzumoya in the Lubombo region. It was to store up to 170 million litres of fuel.
The project had the enthusiastic backing of King Mswati III who rules Swaziland as sub-Saharan Africa's last absolute monarch. The King receives 25 percent of all mineral income on Swaziland which he holds 'in trust for the Swazi nation'. In reality he uses the money to fund a lavish lifestyle that includes at least 13 palaces, fleets of top-of-the-range BMW and Mercedes cars and a private jet. He is due to take delivery of a second jet during 2018.
The Ministry of Natural Resources and Energy is in the process of terminating the contract, the Observer on Saturday newspaper reported (10 February 2018). It said little progress had been made.
In October 2013, King Mswati officially launched the construction of the project at a sod cutting ceremony. He said at the time, 'The project that I bring to you today is one that is geared into transforming lives and take the entire region into higher heights.'
Construction was supposed to take two years and create 300 jobs.
Even though it had already missed its deadline, King Mswati, during the official opening of parliament in 2016, encouraged investors to take advantage of the project.
The project was surrounded in controversy. Once completed the facility would have a 90 million litres fuel capacity to last Swaziland 90 days. It would store 42 million litres of diesel and 38 million litres of petrol. No independent analysis had been undertaken to see if this was needed in Swaziland.
In January 2015, Swazi Media Commentary reported that media had been excluded from a House of Assembly session where a special Act of Parliament was passed to allow the Government to make the payment for the project.
Members of parliament had previously rejected a Bill to guarantee the payment.
Claims of malpractice circulated in the kingdom and members of parliament were concerned that the lucrative contract had not put out to open tender. Media in Swaziland also reported that some people had registered imposter companies as part of a plan to destabilise the project.
After a year the project had not started. It emerged that the company originally contracted to build the project American Tank and Vessel (AT&V) had withdrawn from the contract.
The reason for the withdrawal of AT&V has not been explained publicly, but it is believed that the move was permitted under the terms of the company's contract.
Then, without public consultation or going through the legal open tendering process, the contract was awarded to South African Company, Kantey & Templer Consulting Engineers.
The Swazi Observer, a newspaper in effect owned by King Mswati, reported the Natural Resources and Energy Minister Jabulile Mshwama saying that 'since His Majesty had already announced that work had to begin by cutting the sod, her ministry had been working round the clock that the project kick starts and according to Swazi custom once the King has spoken, things have to be done.'
She said that Kantey & Templer Consulting Engineers had previously erected fuel reserve tanks at the King Mswati III International Airport.
When a Government Bill was first introduced to the House of Assembly, members of parliament threw it out. The Times of Swaziland, the only independent daily newspaper in the kingdom, reported, 'The MPs had tossed out the Bill after concerns had been raised about why the tender for the construction of the about E900m facility had not been an open one and they also questioned the particulars of Kantey & Templer Proprietary Limited (Swaziland) [a company formed to oversee the project].
'The MPs had said all government ministries were expected to adhere to the provisions of the Procurement Act without first resorting to the single provision in the same Act even when the requirements of same are not met by the project at hand as it was in this present case.'
The Times Sunday, an independent newspaper, reported, 'MPs are unhappy that other companies were not engaged, through an open tendering system, to bid for the multimillion project. Suspicion reached high levels when the MPs learnt that a closed tendering system was used to engage the South African company to embark on the project. The nature of the suspicions cannot be repeated for now.'
The Sunday Observer, another newspaper in effect owned by the King, reported that individuals were trying to destabilise the project. It reported, 'Two prominent individuals identified as being behind the hijack include a present cabinet minister and a businessman who also happens to be a former cabinet minister.'
The newspaper reported, 'An individual close to the project confided that there is serious lobbying, by those who want a stake in the project, to have it stalled. "The very same people who wanted to register impostor companies are the ones who are now lobbying members of parliament and cabinet ministers to have the project grounded. They are doing this to serve their own selfish interests. They want to create bad publicity around Kantey & Templer and the project in the hope that the tender award would be cancelled," the well-informed individual said.'
Senators also questioned the awarding of the tender. The Observer on Sunday reported, 'Senator Chief Kusa had also strongly questioned why the initial company AT&V had suddenly withdrew from the project and questioned how the whole project was costed and how the tendered company Kantey & Templer was eventually awarded tender.
'Senator Chief Kekela also wondered if the credibility of the company was considered as the country has experienced a number of projects that have failed as a result of companies whose profiles and credibility was not considered. "We have seen companies that have come and made heavenly promises that have however not come to effect and failed and I must say I do not want to work on risks here as a risk is dangerous, we should not therefore risk with the Swazi people," the Senator said.'
In February 2018, the Ministry of Natural Resources and Energy told the Observer on Saturday, 'The contractor [Kantey & Templer] did not meet the agreed upon timelines and we are working within the framework of the agreement for the next steps in this project. It is envisaged that the project will be returned to tendering in the very near future.'